Pyramid Building Society (in liq) v Chen

[1999] FCA 58

FEDERAL COURT OF AUSTRALIA

Pyramid Building Society (in liq) v Chen [1999] FCA 58

BANKRUPTCY – application for sequestration orders – whether act of bankruptcy committed where the judgment which created the alleged debt made in error – whether there are grounds to go behind the judgment to assess whether there was in truth and reality a debt – whether there was an error of law

Bankruptcy Act 1966 (Cth), ss 43, 52

Wren v Mahony (1972) 126 CLR 212, cited
Gilmour v Pyramid Building Society (in liquidation)(1995) 6 BPR 13,979, discussed
Corumo Holdings Pty Ltd v C. Itoh Ltd (1991) 24 NSWLR 370, cited
Ankar Pty Ltd v National Westminster Finance (Australia) Ltd (1987) 162 CLR 549, cited
Re Flatau 22 QBD 83, cited
Ahern v Deputy Commissioner of Taxation (Qld) (1987) 76 ALR 137, cited

Wilkinson v Osborne (1915) 21 CLR 89, cited

PYRAMID BUILDING SOCIETY (IN LIQUIDATION) V
JI-SHEN-CHEN (AKA KENNETH CHEN)

NG 7346 of 1998

O’CONNOR J
SYDNEY
4 FEBRUARY 1999

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7346 OF 1998

BETWEEN:	PYRAMID BUILDING SOCIETY (IN LIQUIDATION) Applicant
AND:	JI-SHEN-CHEN (AKA KENNETH CHEN) Respondent
JUDGE:	O'CONNOR J
DATE OF ORDER:	4 FEBRUARY 1999
WHERE MADE:	SYDNEY

THE COURT ORDERS THAT:

1.The estate of Ji-Shen-Chen (aka Kenneth Chen) be sequestrated pursuant to the provisions of s 43 of the Bankruptcy Act 1966 (Cth).

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 7346 OF 1998

BETWEEN:	PYRAMID BUILDING SOCIETY (IN LIQUIDATION) Applicant
AND:	JI-SHEN-CHEN (AKA KENNETH CHEN) Respondent

JUDGE:	O'CONNOR J
DATE:	4 FEBRUARY 1999
PLACE:	SYDNEY

REASONS FOR JUDGMENT

1. This is an application for a sequestration order pursuant to s 43 of the Bankruptcy Act 1966 (Cth) (“the Act”) against the estate of the respondent debtor. The applicant creditor says he is entitled to the order because:

   1.The respondent debtor owes the applicant creditor the amount of $2,968,669.98 being the sum due to the applicant creditor after final judgment was given in the Supreme Court of New South Wales on 6 December 1993 (in proceedings number 50628/91) in which the applicant was a plaintiff and the respondent debtor was a defendant.

   2.The applicant creditor holds no security over the property of the respondent debtor.

   3.At the time when the act of bankruptcy was committed, the respondent debtor was personally present in Australia.

   4.The respondent debtor committed an act of bankruptcy in that within 6 months the respondent failed on or before 24 February 1998 to comply with the requirements of the Bankruptcy Notice NN 2622 of 1997 served on the respondent debtor on 3 February 1998 or to satisfy the Court that he had a counter-claim, set-off cross demand equal to, or, exceeding the sum specified in the Bankruptcy Notice.

2. On 6 December 1993 final judgment was obtained by the applicant creditor against the respondent debtor and…